rssDodd to Introduce Bill Tackling Overdraft Fees
Friday, September 18, 2009 at 9:49 am
- 8 Comments
Senate Banking Committee Chairman Chris Dodd (D-Conn.) will soon unveil legislation to rein in the overdraft fees that banks charge consumers who exceed their balances with debit card purchases, American Banker reported Thursday (subscription required).
The bill is sure to provoke an outcry from the banking industry, which claims the overdraft policy protects consumers by covering their purchases even when accounts have run dry. But many lawmakers and consumer groups maintain that the fees — averaging nearly $30 a pop — are excessive, particularly because consumers are rarely informed that they’re about to exceed their balance — or that a $30 penalty will accompany their latte purchase.
There’s a lot at stake here. Overdraft fees are estimated to bring the banks more than $38 billion this year alone, The Washington Post reported today, citing data from Moebs Services, an Illinois-based financial research firm.
Similar legislation to rein in overdrafts, introduced by Rep. Carolyn Maloney (D-N.Y), has been sitting idle in the House for months.
You’ll recall that Dodd recently passed on the chance to take over the chairmanship of the Senate Health, Education, Labor and Pensions Committee, saying there is “important work” left for the Banking panel. He was talking about a slew of new finance industry reforms the Democrats hope to tackle this year, of which overdraft reform is just one piece.
Facing a difficult election next year, Dodd will need such victories to convince a skeptical public that the millions of dollars he’s accepted from the banks over the years haven’t left him using kid gloves when it comes to taking on the industry.
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8 Comments
Comment posted September 18, 2009 @ 5:54 pm
It's an enormous racket. These are the same folks who accepted taxpayer bailouts on account of losses from their reckless derivative trading. So a taxpayer who bounces a check or overdraws his credit card temporarily is paying twice, while the bigwigs pay themselves six and seven figure salaries.
Comment posted September 18, 2009 @ 6:59 pm
I love it..seems like the Obama Administration is attacking the jerks on Wall Street on every level…maybe we will see “change”…of course the Corporations and the GOP will sh*t a brick…(look out for incoming wall to wall..”Government take-over” accusations and attacks)..the government is taking over, all right..taking over the crooked practices and control that Corporate Bankers has had on “our” Government and giving government control back to “the people” as it is written in the Constitution……
Comment posted September 18, 2009 @ 7:10 pm
I have direct billing from a storage warehouse. This month, they ran my charge through 15 times!at $140 a pop! It took 2 weeks to straighten it out, and through the stalling of my bank, $400 in overdraft was added to my account. Fortunatly the storage company gave me the money to cover it all, but the bank is laughing all the way to the…you know!
Pingback posted September 18, 2009 @ 9:04 pm
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Comment posted September 22, 2009 @ 5:12 am
It about time the banks are call on robbing their customers and being able to run rampit with their fees all whilr they police them selves.
Pingback posted September 23, 2009 @ 1:14 pm
[...] (D-N.Y.) introduced a consumer protection bill earlier in the year, and Sen. Chris Dodd (D-Conn.) has vowed to follow suit later this [...]
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